Corporate social responsibility: do well by doing good

Corporate social responsibility has myriad benefits for franchise businesses and the recipients of their charitable work

Community involvement by a franchise is not just a nice extra. Corporate social responsibility (CSR) initiatives such as charity events and community activities show an organisation likes to do good as well as make money. It attracts prospective franchisees, raises the profile of the franchise, helps boost team morale and can even win more customers.

Research shows that there are sound business reasons for a franchise to get involved in community and charity activities - as well as spreading a bit of happiness, it can even increase profits.

Bottom line benefits

Shaun Thomson, CEO of Sandler Training (UK), the franchise that provides training and advice to other businesses, says: “Done right, CSR programmes can have a great impact on the business bottom line of a franchise.”

Work for Good, which provides a charity giving platform for businesses, found that 68 per cent of 100 small businesses surveyed said charitable giving increased profits, while 37 per cent said it helps attract new clients. Businesses donating over 0.5 per cent of turnover were twice as likely as those donating below 0.5 per cent to report that it enhanced company reputation and helped with recruitment and staff retention.

Attracting recruits and customers

CSR programmes attract prospective franchisees, particularly among the under-30s. Studies have shown that these ‘millennials’ are likely to be more attracted to franchises that highlight their community and charity initiatives.

There is also evidence that charity and community work attracts more customers.

Alexander Chernev and Sean Blair, authors of a paper published in the Journal of Consumer Research, say: “Corporate social responsibility can lead consumers to believe that the products of companies engaged in socially responsible activities are better performing.”

They found that consumers rated red wine as tasting better when told that the winery donated to a heart charity. Other studies showed the same effect with running shoes, tooth whiteners and hair loss treatments. However, they found that advertisements talking about a company’s CSR activities did not always help boost its image, but local public relations activities and stories on social media did.

Boosting staff morale

CSR efforts also benefit franchises internally.

Richard Owen-Hughes is marketing director at the Bradfordbased specialist transport and logistics recruitment franchise Driver Hire, where staff are working with local school students to improve their job finding skills.

Richard says: “Giving staff the opportunity to take time out to contribute to a worthwhile project is very motivating and can help to bring teams or departments together in a way that might not happen so easily with regular dayto- day work. We have certainly found that to be the case.”

Doing CSR right

If you’re looking for a franchise, check the effectiveness of its CSR.

Shaun says: “Many company’s CSR initiatives start the year well, but peter out by Q2. It happened to us, so now we have a different approach, using our skills as sales and leadership trainers.

“We offer free training places to unemployed 18-24-year-olds to increase their skills and help them get a job or start their own business. Since then, we have trained over 100 young people across our regional centres - it has opened doors for new business, helped with recruitment and has been a huge motivator for staff.”

He advises that the key to a successful CSR initiative is ensuring that the charity you work with is aligned to your business model. If the prospective customer is local, then supporting a local charity or sports club engages the target market. Likewise, a business in the property market might engage with a property related charity, such as Shelter.

Alternatively, a charity dear to the heart of the company increases motivation. For example, if a colleague has suffered a particular illness, staff are more motivated to keep the programme going.

If staff are donating time, plan who will be involved in activities and how long they take, ensuring that the time is spread fairly across team members and the year. Using your own assets keeps costs down.

How to measure success

As well as staff morale and funds raised, it pays to have hard metrics to measure.

Shaun says: “At Sandler, our community giving budget and time comes from our marketing budget. We consider it to be a brand building activity and the outcomes we measure are recognition - via local public relations - and referrals. The outputs provide content for the website and social media platforms.”

Tax breaks for charity work

The tax system encourages charity work. Limited companies pay less corporation tax when giving the following to charity:

• Money, equipment or trading stock (items they make or sell).
• Land, property or shares in another company (shares in your own company don’t qualify).
• Employees (on secondment) and sponsorship payments.

You claim the tax relief by deducting the value of your donations from your total business profits before you pay tax. Note that rules for sole traders and partnerships are different.

A limited company pays less corporation tax if it gives equipment or items it makes or sells - called trading stock - to a charity or community amateur sports club, provided it’s registered as such.

You can claim full capital allowances on the cost of donated equipment, provided it has been used by your company. This includes items such as office furniture, computers, printers, vans, cars, tools and machinery.

If your company donates its trading stock to a charity or community amateur sports club, you don’t have to include anything in your sales income for the value of the gift. This means you get tax relief on the cost of the stock you’ve given away.

Seconding employees

You can deduct any costs as normal business expenses if your company temporarily transfers an employee to work for a charity - known as a secondment - or an employee volunteers for a charity in work time.

Your company must continue to pay the employee and run PAYE on their salary. You can set the costs, including wages and business expenses, against your taxable profits as if they were still working for you. You cannot claim the costs of employees on secondment or volunteering at a community amateur sports club, however.

A cause close to my heart

“We raised £5,000 for a charity that helps people at risk of suicide and their families”

Ciara Theidermann, franchisee with House of Colour in Surrey, recently held a fashion show to raise awareness and funds for a suicide prevention charity.

She explains: “Our event, called Excess Baggage, combined a fashion show and sale of donated items, such as high quality bags, shoes and clothes, with a talk from me about suicide awareness, a cause close to my heart because my mum died by suicide.

“We charged a £25 entry fee and sold the clothes and accessories for donations. We raised £5,000 for a charity that helps people at risk of suicide and their families.”

Ciara sees a link between mental health and her House of Colour image consultancy and personal styling franchise: “We all know how wearing the right clothes can make you feel good about yourself, which I see as helping prevent mental health issues.

“The event raised money for a cause I support and I have gained 15 new clients. Charity fundraising raises your business profile and means you’re associated with doing good - and everyone likes to buy from good people.”

Wacky races twin town challenge

“You buy a £500 banger, add your own style and then get sponsorship”

The Sandler UK Oxfordshire franchise, headed up by Anneli Thomson, regularly competes in the Wacky Races Twin Town Challenge, which sees 100 cars travelling from Oxfordshire to Le Touquet in northern France over one weekend.

Anneli says: “You buy a £500 banger, add your own style and then get sponsorship. We had a Christmas theme and each of us dressed up as trees. We raised over £2,500.

“The cause is very dear to our hearts - a local charity called SpecialEffect, which offers technology that supports people with physical disabilities. The charity takes the time to understand the needs of each individual and tailors their technology solutions, helping them to do the things they want to do in the way that’s easiest for them.”

An important element of our business

“We’re in a position where we can help and have a positive impact”

Jayne O’Flynn says: “Community engagement is an important element of our business. It’s nice to be able to help where we can and have a positive impact on the local community.”

Jayne and husband Michael, who bought the Driver Hire Grimsby and Scunthorpe franchise two years ago, have been involved in community work for many years. It has certainly increased their local profile: their dedication led to them being named as joint runnersup in the Hull & Humber Chamber of Commerce Excellence in the Community Business Award in 2019.

Jayne and Michael have organised a number of fundraisers and sponsored community events. To date, they’ve raised £20,000 for When You Wish Upon A Star, a charity that grants the wishes of children living with life threatening illnesses. They’re also currently raising £15,000 for a 52-year-old Grimsby woman to help her walk again following a fall in 2018.

In addition, they support local hospices Lindsey Lodge and St Andrew’s and sponsor high-vis jackets for pupils at Havelock Academy in Grimsby who cycle to school. Other charities to benefit from their community programme are Community Linkage Lincoln, Cash for Kids and the NSPCC.

Jayne won the Work Wise Women Grimsby Business Woman of the Year Award in 2017 and has a long history of supporting charities. For 16 years she’s worked with Immigrant Counselling and Psychotherapy, the mental health charity based in London, and has also been a trustee of the Richard Mills Foundation supporting autism.

Jayne says: “Community engagement is very important to us. As a local business, we’re in a position where we can help and have a positive impact. It’s certainly something that’s very close to our hearts.”

Helping to make a difference

“Throughout the year various causes are supported, either through fundraising or volunteering time”

Action by individual franchisees can often spur a whole franchise network to start raising funds for a charity.

Last summer Simon Richardson, owner of courier franchise InXpress Nottingham North, instigated a network-wide initiative. Simon’s stepson, Oliver, has a school friend, Harry, who has cerebral palsy. He can’t talk, but communicates using his eyes via an eye gaze computer system.

Harry is a bright boy, but struggles to control his body due to his condition. He has a wheelchair, but it was only suitable for use at home, leaving him housebound. Harry had tested a wheelchair at a disability show he attended with his mum, Lisa. It was perfect for giving him access to the outside world, but was very expensive.

When they heard about Harry, the InXpress Gives Back committee pledged to raise the £2,227 needed to buy his chair. A donations page was set up and the network was asked to support it. Reading franchisee Craig Atkins even took on snooker star Ronnie O’Sullivan to help raise funds.

The money was raised just before Christmas and Simon invited Harry and mum Lisa to his family house, where Harry’s new wheelchair was unveiled.

“Lisa and Harry were both over the moon when the doors opened and the wheelchair was all set up,” Simon says. “Lisa was quite emotional, while Harry was thrilled. Over the weekend he went out and about in it, including some pretty rough country terrain, but the new wheelchair could handle it, as it has tyres that are suitable to get across rough ground.”

One of InXpress’ core values is to give back.

Jon White, InXpress country manager for the UK, says: “We’re delighted our network of franchisees and the support centre have helped Harry to get a new wheelchair that will help make life a bit easier for him and his family.

“Giving back is at the heart of what we do at InXpress and throughout the year various causes are supported, either through fundraising or volunteering time. This is a great demonstration of how it helps make a difference.”

The author

Linda Whitney writes about franchising for the Daily Mail, What Franchise and many other publications